Introduction to the Income-Shares
Child Support GuidelineIncome Shares Model Violates Due Process

August 7, 2002

by Roger F. Gay

Calculating the amount that parents are
ordered to pay as child support involves the use of a rigid formula
known as a "child support guideline." The amount determined by use of
a state's guideline is legally presumed correct in all child support
cases. This practice began in late 1989, in response to a
newly established condition for eligibility for federal funding
of the child support enforcement program. Although parents have a legal
right to challenge the presumptive amount, design of the mathematical
formulae and state statutes in which they are applied have not developed
sufficiently in support of reasonable challenges. The result has been
a dramatic arbitrary increase in the amounts courts order in child support
cases.

"Promoters claimed that
the Income-Shares model was derived from guidelines that were already
in use and that it corresponds to traditional child support law.
Neither of these claims is true."

In order to remain eligible for federal
funding, states are required to review their guidelines at least once
every four years. The statutory purpose of the review is to assure that
use of a guideline results in an appropriate award in every case. Indiana
and Virginia are among the states currently reviewing their guidelines.
They are among the 37
states that base their guideline design on what is known as the
"Income-Shares model." Although this is the most popular guideline design
in the country, few people understand its origin, history, and character.
No state has ever shown that use of an Income-Shares guideline results
in appropriate child support awards. Although states go through the
motions of reviews on schedule, the requirement to assure appropriate
results has never been met. So far, not one single state has invented
or applied a technically valid review procedure.

Promoters claimed that the Income-Shares model was derived from guidelines
that were already in use and that it corresponds to traditional child
support law. Neither of these claims is true. They claim that the model
is supported by economic data and economic studies. These claims are
also false. Contradicting their claim that the Income-Shares model corresponded
to established law was their claim that orders made under established
law were "inadequate" and needed to be increased by a presumptively
correct formula similar to the Income-Shares model. The claim of inappropriate
orders under traditional law, explained below, is also false.

Surrounding these specific claims were the more general claims incorporated
into "deadbeat dad" political propaganda. These general claims were
also false and illogical. Supporters claimed that men often abandoned
wives and children leaving them dependent on public support. Even if
true, increasing one man's child support order does not increase the
regularity of another man's payments. (For more information related
to the general claims, see Divorced
Dads: Shattering the Myths.)

Presumptively correct child support guidelines generally have their
origin in Senate hearings on welfare reform held by Daniel Patrick Moynihan.
Reformers wanted to use rigid formulae, just as socialist countries
do, in place of principled case-by-case decision making as required
by constitutional law. Senator Moynihan grilled witnesses for evidence
of a valid technical basis for such formulae, but witnesses were unable
to produce it. No research had been performed to define the idea in
detail and test it.

Supporters of the idea began spreading the rumor that the traditional
process of awarding child support was non-uniform and unpredictable.
An oft repeated complaint;

Two fathers living in the
same neighborhood who go to the same job with the same income can pay
different amounts of child support.

"Presumptively correct
child support guidelines generally have their origin in Senate hearings
on welfare reform held by Daniel Patrick Moynihan. Reformers wanted
to use rigid formulae, just as socialist countries do, in place
of principled case-by-case decision making as required by constitutional
law."

The criticism was supported by a simple
magic trick. An equation would be used that did not account for important
mitigating factors such as visitation arrangements and the mother's income.
One might for example calculate a fixed percent of the payer's income.
The equation would produce results that differed from actual orders that
did take such facts into account. Pretending the simple equation gave
the correct answer created the illusion that actual amounts in orders
were determined at random.

The first Income-Shares guideline, similar to those in use today, was
created by William Hewitt for the National Center for State Courts (NCSC)
in 1982 as a trial investigation for the Washington State Association
of Superior Court Judges. [1] NCSC was a powerful driving force behind
development and implementation of child support guidelines as we know
them today. The primary function of this Congressional organization is
to bring states into compliance with central federal administration.

Hewitt concluded that the formula was inappropriate for use as a child
support guideline. He was particularly critical of the central component
of its design; the so-called "estimate of the cost of raising children"
derived from national family spending data. In his report he suggested
that;

. . . a simple methodology
which explicitly relies on "user opinion" will be more effective in
moving practices more uniformly toward a fair standard than does reliance
on opaque and highly derivative expert interpretations of existing but
fundamentally off-target primary economic data.

Knowing what whole families spend does
not tell us what the cost of raising children is and certainly does not
tell us what a just and appropriate child support order is. "Experts"
were making up answers that were not useful in making appropriate child
support decisions. (On this point, see also Child
Support's Wacky Math.)

The chain of deception in support of the Income-Shares model began with
a politically involved assistant professor of psychology at the University
of North Carolina. Ronald Haskins, who later became a lead analyst on
welfare reform for the Republican congressional staff, wrote a report
funded by the U.S. Office of Child Support Enforcement (OCSE). [2] Haskins
suggested that requiring the use of either of two formulae in all child
support cases would result in a 350 percent increase in the amount ordered
nationwide.

Rather than reaching the obvious
conclusion that the equations produced inappropriate results, Haskins
claimed that existing child support awards were too low. By doing so he
implied a vast conspiracy by primarily male judges against women and children.
He dubbed the difference between the results of the equations and existing
orders the "adequacy gap" in child support awards. News of Haskins' "adequacy
gap" quickly spread through similarly politically inclined academics,
special interest groups, and as sensational news on radio and in newspapers.
An astonished nation was told that the system for determining child support
orders established in the shadow of the Constitution had to change.

"Haskins claimed that existing
child support awards were too low. By doing so he implied a vast
conspiracy by primarily male judges against women and children.
He dubbed the difference between the results of the equations and
existing orders the "adequacy gap" in child support awards."

The adequacy gap in Haskins' research method
was so wide that there is little reason to believe in the honesty of any
competent analyst who relied on it. People routinely complain about its
faults, which are still with us today. A Georgia court recently cited
some of the same faults as part of the grounds for declaring their guideline
unconstitutional, (even though Georgia uses a different guideline model).
Haskins did not include consideration of visitation, tax consequences
and other mitigating factors. He did not in fact, apply established child
support law. He merely showed that if an equation is used that produces
arbitrarily high results, then results will be arbitrarily high. He had
no basis whatsoever for concluding that existing child support orders
were incorrect.

As part of the Child Support Enforcement Amendments of 1984, Congress
funded assistance to the states in development of child support guidelines
and charged OCSE with responsibility for the project. Robert Williams,
the most well-known Income-Shares promoter, had no previous history of
research in development of child support guidelines and founded Policy
Studies, Inc. as a new consulting business. OCSE gave the contract to
Robert Williams of Policy Studies, Inc. Williams
is a child support collection entrepreneur whose company keeps around
one third of the child support it collects. Driving orders higher produces
more cases of debt and higher average debt directly increasing his profit.

Without justification, Williams treated Haskins' "adequacy gap" as a scientifically
valid phenomenon. In the first few pages of his final report [3] Williams
cites Haskins' conclusion as fact and establishes the de facto
goal of his design, to manipulate the amount of child support ordered
nationwide to an amended 250 percent of what it would be if decided by
established child support law.

Williams also used a report by Thomas Espenshade [4] as the primary economic
study upon which his version of the Income-Shares model was based. Espenshade
is an expert on immigration who became interested in family planning issues.
His summer exploratory research on the cost of raising children failed
to produce proper scientific results. His estimate of the cost of raising
children was born of fudge factors used in his calculations.

I rarely mention Espenshade in my critiques because I find little reason
to criticize an academic for exploratory research. To my knowledge, Espenshade
never claimed to have performed any research on design of child support
guidelines nor did he ever approve of the use of his estimate in Williams'
Income-Shares model. Because his work became important to child support
guideline activities it must be critically reviewed nonetheless.

"OCSE gave the contract
to Robert Williams of Policy Studies, Inc. Williams
is a child support collection entrepreneur whose company keeps
around one third of the child support it collects. Driving orders
higher produces more cases of debt and higher average debt directly
increasing his profit."

Espenshade failed to find a valid method
for accurately estimating the cost of raising children from national family
spending data. The major criticism I have for his report is that he did
not report the failure. He says again and again what he wants to accomplish
and presents his estimate, leaving readers to assume they are looking
at a scientifically valid, accurate, general purpose estimate of the cost
of raising children. It is left to highly competent analysts to study
his results, equations, and footnotes to equations very carefully to discover
the truth. This is also a weakness in the research process of the Urban
Institute that published, promoted, and sold his report. Espenshade's
study was apparently not adequately reviewed before publication.

University of Chicago researchers Edward Lazear and Robert Michael reviewed
existing methods of estimating the cost of raising children when trying
to develop a theory for dividing expenses between individuals within households.
[5] They concluded that;

. . . the presumption that
underlies the focus of much of the empirical research and policy debate
on income distribution seems born of ignorance and is supported by neither
theory nor fact.

I agree. The cost of raising children estimates
used in child support guidelines today were born of ignorance and are
supported by neither theory nor fact. They would be inappropriate for
use in child support guidelines even if that were not true. Espenshade's
estimate was for two parent families rather than single parent households.
The relationship between average spending in two parent families and spending
on children in "broken homes" is mathematically random. The standard of
living that might exist if the parents remained together was one of many
mitigating factors in established child support law. More important however
were the actual circumstances of the parents and children. Promoters of
the Income-Shares model were claiming an "economic basis" for their model.
But the economics of the intact family are unrelated to the real life
circumstances of the people involved with court ordered child support.

Despite the importance of the claim of scientific validity or valid opinion
based on "economic studies," nothing related to the chain of "studies"
involved in the development of the Income-Shares model was ever established
by scientific process. No part of it was tested. Nothing was validated.
Nothing was tried and true.

Superficially, acceptance of Williams' work was aided by the inclusion
of a highly qualified advisory panel that made recommendations upon which
the technical work should have been based. But the Income-Shares model
departed so far from the advisory panel's recommendations that it earned
an angry critique by panel member and law professor Harry Krause, published
in the University of Illinois Law Review. [6] The Income-Shares
model does not correspond to the thinking of the advisory panel.

More deeply however, political acceptance of Williams' model in the states
was driven by the federal funding mechanism, which was tied to the amount
of child support "collected." The new child support enforcement system
began enrolling the best payers and counted all payments as "collections."
By inflating the amount "collected" in this way, the program received
more funding. Arbitrarily increasing the amount awarded increased the
amount paid, and therefore increased the amount of federal funds received.

Complaints about the "economic
estimates" were so common that there was a political reaction. As part
of the Family Support Act of 1988, Congress again created a line-item
specific to the technical development of guidelines. This time, they charged
the OCSE with the task of updating the estimates of the cost of raising
children. The job went to University of Notre Dame macro-economist David
Betson.

"The cost of raising children
estimates used in child support guidelines today were born of ignorance
and are supported by neither theory nor fact."

Betson, who holds an M.A. and Ph.D. in
economics from the University of Wisconsin-Madison, was a research associate
at the Wisconsin Institute for Research on Poverty when it was headed
by Irwin Garfinkel. Garfinkel is the academic who imported the second
most-used child support guideline, known as the Percent-of-Income formula,
along with a suite of policies from socialist countries. The policies
were bundled into what became known as the "Wisconsin Model" for welfare
reform. The Wisconsin Model became the model for national reform and led
to the appointment of Wisconsin's governor Tommy Thompson to his current
position as Secretary of Health and Human Services. Betson was a research
fellow at the institute from 1982-1995 and is currently a research affiliate.

Betson began his quest with the apparent naïveté of
a macro-economist delving for the first time into micro-micro-economic
issues. Everyone else had done poorly but he would do better, he thought.
In the end, he produced several dramatically different estimates and could
not provide a single rational reason to prefer one over any other. [7]
He did however express a personal preference for the estimate coming closest
to Espenshade's, thus providing political support for Williams' model
and indirectly lending credence to the arbitrarily high results of the
Percent-of-Income formula introduced by Irwin Garfinkel.

A second report was created by consulting firm Lewin/ICF. [8] The Lewin
report magically produced a clear favorite claiming Betson's study as
the source, but actually contradicting the absolute inconclusiveness of
Betson's scientific result. The estimate selected was the one that came
closest to Espenshade's. This I suppose, to someone not the least bit
serious about honesty, might be regarded as the expert consensus some
Income-Shares promoters contend exists.

The Lewin report was created to fulfill a requirement for a report to
Congress and Lewin was required to take public comment into consideration.
Competent professional analysts and economists criticized the estimates
but Lewin dismissed all criticism with a short comment. Fathers were complaining
because they wanted to pay less child support.

It was at this point that fathers'
rights advocates may have made their biggest mistake, although it was
difficult to recognize at the time. Williams pretended to have valid "economic
studies" supporting his design. In fact, he claimed that the Income-Shares
model was based directly on "economic data." Neither claim was true and
it seemed natural and logical to attack these alleged facts. Attempts
were made to do just that by producing alternative economic studies using
the same data and comparable methodology. But that led to a trap.

Not only was the Income-Shares guideline never subjected to serious technical
review, it would not face judicial scrutiny either. Legal challenges were
filed in more than one state but courts placed a very heavy burden on
challengers to prove the guidelines were wrong. A valid estimate of the
cost of raising children based on national family spending data became
the holy grail of guideline debate. There were plenty of rumors, speculation,
and attempts to find it but no one was ever able to hold it in their hand
and say "Here it is."

National family spending data shows that whole families differ, often
dramatically, in their spending behavior. The data on spending by and
for individual family members, including children, is grossly inadequate.
Even if it was possible to derive the average cost of raising children
from that data (it is not), the average would not describe what a typical
family spends. There is no way to derive an accurate one-size-fits-all
estimate of "the cost of raising children" from national family spending
data. Challengers could prove nothing. Of course, Income-Shares advocates
could not prove their case either but they did not need to. Where an Income-Shares
guideline had already become law they won by default.

Courts are very much to blame for having created the trap that challengers
found themselves in. Using presumptively correct child support guidelines
in the absence of definitions and principles that can be used to challenge
them is a direct and obvious threat to due process. Due process is a fundamental
right. Therefore the highest level of scrutiny is required when reviewing
child support guidelines. Instead, courts consistently applied the very
lowest form of review, accepting the guidelines regardless of even the
most obvious flaws merely because they approved generally of the authority
of states to order payment of child support.

"Courts are very much to
blame for having created the trap that challengers found themselves
in. Using presumptively correct child support guidelines in the
absence of definitions and principles that can be used to challenge
them is a direct and obvious threat to due process."

Economic studies, using fundamentally off-target
data, could not provide compelling scientific proof of anything. They
were therefore not useful in meeting the standard of proof that the courts
required. Economic studies could not show whether the government was pursuing
a legitimate objective or acting in a completely "arbitrary and irrational"
way. Courts responded that ordering the payment of child support is a
legitimate objective and not arbitrary and irrational. The economic analysis
of the day by Espenshade, Williams, Betson, and guideline challengers
did not sufficiently address the essential legal issues.

The fact that challengers were unable to produce a scientific result by
using the same technical approach as defenders only served to produce
the false impression that it is impossible to reach an objective child
support decision. In P.O.P.S.
v Gardner, the U.S. 9th Circuit Court of Appeals said;

The table does not purport
to provide merely for the child's subsistence, rather it is designed
to sustain the child at a standard of living concomitant with her divorcing
parents' income. The measure of that standard is subjective.
[emphasis added]

Had those challenging the guidelines taken
one step back from the numeric data, they would have found Williams' analysis
and logic on the whole entirely baseless, filled with technical error,
and in a word  goofy. The Income-Shares model did not correspond
to established child support law and mishandled every aspect of child
support decision making. Even if the numeric information used in the Income-Shares
model had been credible, Williams' interpretation of the data, analysis,
and recommendations were not.

Had they stepped back a little farther, they would have noticed the dramatic
change in child support statutes. The definition of the term "child support"
was suddenly missing along with the fundamental principles upon which
child support awards were based. Not only did the Income-Shares model
not correspond to established child support law, it does not correspond
to any set of rational decision principles nor any reasonable definition
of child support. It could only be implemented in the absence of such
definitions and principles in the statutes.

When the Georgia guidelines were declared
unconstitutional earlier this year, the critical difference was the
level of review used by the court. Although I am convinced that the highest
standard of review ("strict scrutiny") is required when deciding the constitutionality
of guidelines, the Georgia court used an intermediate level of review.
This was sufficient. Any review more probing than blind acceptance will
reveal the absurdity of both Percent-of-Income and the Income-Shares type
guidelines.

Once beyond blind acceptance, once courts actually take a competent look,
it becomes apparent that current guidelines fail even the lowest level
of review. The Georgia decision says this:

Further, if this Court were
only to apply the lowest standard of scrutiny, i.e., whether the Guidelines
bore a rational relationship to a legitimate government purpose, the
Guidelines would still fail.

Once Income-Shares guidelines were politically
adopted in many states the new argument for their continued use was established;
that states use the Income-Shares guideline. States that adopted lower
guidelines were faced with the argument that they were too low because
they were lower than other states. Just as in Haskins initial "study,"
higher was treated as being correct. States were also reminded that increasing
the amount ordered would entitle them to higher levels of federal funding.
This would be true so long as regulators continued to ignore review requirements
and courts ignored due process.

The absence of any rational basis
for the Income-Shares guideline became increasingly difficult to ignore
even given the excuse that other states did it. Eventually a new explanation
was adopted. The Income-Shares model seeks to maintain the standard of
living in the custodial parent home that might exist if the parents lived
together. Although the standard of living that the parents together can
provide was a traditional consideration, the explanation given by Income-Shares
promoters is a perversion of traditional child support law and an idea
that state courts had explicitly rejected prior to federal reforms. In
post-divorce circumstances their idea is impractical and contradictory
to the concept of child support, which is limited to supporting children.

It is an established scientific fact that in post-divorce circumstances,
adherence to such a goal leads to the inclusion of alimony
in child support awards. An alternative method for calculating child
support, known as the standard of living equalization method, was
rejected by all states specifically because it is illegal to include alimony
or spousal support in a child support award. When the Percent-of-Income
formula was declared unconstitutional in Georgia the inclusion of "hidden
alimony" was given as one of the reasons.

What many people can see even without detailed analytical charts and graphs
is that results given by Income-Shares guidelines are often irrational
and inappropriate. In their initial form, based directly on Williams'
raw theory, presumptive child support orders were often more than the
payer's net income. This problem was only partially corrected by arbitrarily
lowering the guidelines' numeric table at the low end and later setting
hard limits. The numbers and logic were not valid at the high end either
but the fact that higher income payers were able to pay did not force
change.

"When the Percent-of-Income
formula was declared unconstitutional in Georgia the inclusion of
"hidden alimony" was given as one of the reasons."

Other obvious indications are found
in dealing with parenting time. When two parents with equal income spend
nearly equal time and money caring for their children, one parent can
still be ordered to pay a large amount to the other. People have also
noticed that Income-Shares guidelines do not reasonably account for
individual categories of spending such as housing, transportation, and
entertainment and that they do not properly account for such factors
as dependent tax benefits and medical expenses, among other things.

Federal law includes another requirement for eligibility to receive
federal funds; the inclusion of "deviation criteria" in state statutes.
These criteria typically do not provide the basic definitions and principles
necessary to determine whether the presumptive amount is just and appropriate.
Instead, they typically provide very restrictive additions to the guideline
without specific supporting mathematical procedures. Most often they
support only upward deviations from the basic calculation. Such additions
do not provide the missing ingredient that leads to "just and appropriate"
child support awards.

The law presumes that the amount calculated by use of a guideline is
the correct amount to be awarded. This presumption creates a direct
and obvious threat to due process of law. If the presumption is incorrect
in even one case, then the law is unconstitutional. Income-Shares and
Percent-of-Income guidelines produce results that are random in relation
to children's needs and parents' relative ability to provide. They are
known to give wildly inappropriate results in many cases. After thirteen
years in the face of compelling evidence that the guidelines are unconstitutional,
it seems we are waiting for more than the decision to abandon them.
We are waiting for a return to western civilization and the rule of
law.

Hewitt, William E. 1982.
Report on the Washington State Association of Superior Court Judges,
Uniform Child Support Guidelines, Institute for Court Management,
Court Executive Development Program.

Ronald Haskins, Andrew W.
Dobelstein, John S. Akin, and J. Brad Schwartz, Estimates of National
Child Support Collections Potential and the Income Security of Female-Headed
Families, Final Report, Office of Child Support Enforcement, April
1, 1985.

Robert G. Williams, Development
of Guidelines for Child Support Orders: Final Report, U.S. Department
of Health and Human Services, Office of Child Support Enforcement,
March 1987.

Edward P. Lazear and Robert
T. Michael, Allocation of Income Within the Household, University
of Chicago Press, 1988, page 25

Krause, Harry 1989, Child
Support Reassessed: Limits of Private Responsibility and the Public
Interest, University of Illinois Law Review, Vol. No. 2, 1989.

David M. Betson, Alternative
Estimates of the Cost of Raising Children from the 1980-86 Consumer
Expenditure Survey, U.S. Department of Health and Human Services,
Office of the Assistant Secretary for Planning and Evaluation, September
1990

Lewin/ICF, Estimates of
Expenditures on Children and Child Support Guidelines, U.S. Department
of Health and Human Services, Office of Child Support Enforcement,
October 1990